Finance
What is a 'balloon mortgage' and what risk does it pose for Kansas borrowers?
AA mortgage with no risk; payments balloon upward gradually
BA mortgage with lower regular payments followed by a large lump-sum payment at maturity; the balloon payment risk is the borrower may not have funds or refinancing available✓ Correct
CA mortgage only for high-value properties
DA government program for first-time buyers
Explanation
A balloon mortgage has lower monthly payments (often interest-only or amortized over 30 years) with the remaining principal due as a lump sum at the end of the term (often 5-7 years). Borrowers risk being unable to refinance or pay the balloon.
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